The government’s allocation of Rs 2,000 crore as subsidy support for UPI payments is aligned with existing policy, and any future shortfall will be addressed as required, said M Nagaraju, Secretary, Department of Financial Services (DFS), in an exclusive interaction with TNIE.
He indicated that the government remains open to recalibrating the subsidy or even revisiting the question of making certain UPI transactions chargeable, depending on evolving policy needs.
“The Rs 2,000-crore provision for UPI is made in line with existing policy and projected requirements. If there is any shortfall, it can always be addressed at the revised estimates stage, as has been done in the past — there have been significant variations between Budget Estimates and Revised Estimates in earlier years as well,” said Nagaraju.
The Rs 2,000 crore provision for 2026–27 is lower than the current financial year’s payout of ₹2,196 crore, which itself was sharply raised from a Budget Estimate of ₹476 crore.
On the possibility of levying charges on UPI transactions, Nagaraju said several ideas are under discussion and the eventual decision will depend on the policy framework that emerges. “Once these ideas are discussed at the government level, the threshold will additionally emerge,” he said.
One proposal under consideration is to levy charges on UPI transactions above a certain threshold, while keeping nearly 90% of transactions free.
UPI’s international push
Nagaraju said adequate safeguards and systems are in place for UPI’s operations both in India and overseas, as the platform continues to gain international traction. However, expansion outside India depends on formal, bilateral arrangements and approvals from respective central banks.
With India looking to expand UPI to 7–8 more countries, he emphasised that such partnerships cannot be entered into unilaterally.
“Just as India is selective about allowing foreign payment systems to operate domestically, other countries also evaluate UPI based on their own regulatory and strategic considerations. International adoption is therefore a negotiated process, not an automatic one. India’s approach has been to offer UPI primarily to facilitate seamless digital payments for Indian citizens travelling abroad, rather than to derive direct commercial gains,” Nagaraju said.
Progress on Unified Lending Interface
The DFS Secretary also highlighted progress on the Unified Lending Interface (ULI). The current focus is on onboarding all central government departments onto the platform, with banks already integrated. Several state governments have joined, while discussions continue with the rest.
“Given the scale of technological integration involved, the process naturally takes time. However, we are optimistic that within the next few months, all central government departments, along with state governments, will be fully onboarded,” he added.